In reaching its conclusion, the Ninth Circuit borrowed liberally from the recent Second Circuit decision in Strubel. It also cites a range of other circuit court opinions, suggesting a burgeoning consensus in what had been a murky and arguably dissonant jurisprudence.

The Ninth Circuit laid out its framework as follows:

In evaluating Robins’s claim of harm, we … ask: (1) whether the statutory provisions at issue were established to protect his concrete interests (as opposed to purely procedural rights), and if so, (2) whether the specific procedural violations alleged in this case actually harm, or present a material risk of harm to, such interests.

To answer the first question, the court examined the statutory purpose, and whether those aims were “‘real,’ rather than purely legal creations.” In holding that they were, the court also pointed to the fact that similar interests have been protected at common law:

Just as Congress’s judgment about an intangible harm is important to our concreteness analysis, so is the fact that the interest Congress identified is similar to others that traditionally have been protected.

The Third Circuit handed down an opinion Monday holding that a violation of the Telephone Consumer Protection Act (TCPA) confers Article III standing even in the case of intangible injuries.

The opinion may prove to be less interesting for its impact on TCPA jurisprudence than for guiding courts in their efforts to understand and apply the Supreme Court’s Spokeo decision. After all, within the TCPA context, there already appears to be a consensus that statutory violations satisfy Article III’s requirements.

The Third Circuit’s new decision, in Susinno v. Work Out World, does not require distinguishing between procedural and substantive harms – even though the Third Circuit’s earlier Horizon decision had emphasized the distinction. Per Susinno:

We summarize Horizon’s rule as follows. When one sues under a statute alleging “the very injury [the statute] is intended to prevent,” and the injury “has a close relationship to a harm . . . traditionally . . . providing a basis for a lawsuit in English or American courts,” a concrete injury has been pleaded.

It’s axiomatic that – at the pleading stage – all inferences are to be drawn in plaintiffs’ favor. All well pled allegations are to be taken as true.

Yet complaints are often nitpicked, especially by defendants who foresee trouble once discovery is underway. They search for holes in the pleadings, even when (or especially when) those holes are likely to be filled later with evidence.

That strategy often works. So plaintiffs can take solace in the new Second Circuit opinion that not only reiterates these general principles, but expressly relies on them to form the backbone of its opinion.

The case is John v. Whole Foods Market Group. Plaintiff alleged Whole Foods systematically overstated the weights of prepackaged foods, leading to overcharges for its customers. The case followed a New York Department of Consumer Affairs investigation, which concluded some 89% of Whole Foods’ prepackaged foods featured overstated weights.

Whole Foods moved to dismiss on standing grounds. It argued that just because the weight of 89% of its food had been overstated, that didn’t necessarily mean that the weight of plaintiff’s food had been overstated. So, Whole Foods argued, plaintiff could not plausibly allege that he overpaid. Whole Foods also sought dismissal on the ground that the complaint lacked details about the New York investigation’s methodology.… Read more

In the TCPA context, a strong majority of courts appear to be in agreement that statutory violations give rise to concrete harm. The Ninth Circuit agrees.

The panel in Van Patten v. Vertical Fitness Group, began its Article III analysis by citing Spokeo for the proposition that “’both history and the judgment of Congress play important roles’ in supporting our conclusion that a violation of the TCPA is a concrete, de facto injury.”

The court elaborated:

The TCPA establishes the substantive right to be free from certain types of phone calls and texts absent consumer consent. Congress identified unsolicited contact as a concrete harm, and gave consumers a means to redress this harm. We recognize that Congress has some permissible role in elevating concrete, de facto injuries previously inadequate in law “to the status of legally cognizable injuries.” Spokeo, 136 S. Ct. at 1549 (quoting Lujan, 504 U.S. at 578). We defer in part to Congress’s judgment….

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In the past week, panels from the Third and Seventh Circuits have issued rulings that interpret the Supreme Court’s Spokeo decision on Article III standing. The decisions reflect a possible circuit split concerning the test for determining when the violation of a federal statute gives rise to a “concrete” harm under Spokeo.

In the Supreme Court’s decision, there are several references to “risk of harm” in the discussion of when a statutory violation causes concrete harm. For example, toward the end of the opinion, the Court wrote:

A violation of one of the FCRA’s procedural requirements may result in no harm. For example, even if a consumer reporting agency fails to provide the required notice to a user of the agency’s consumer information, that information regardless may be entirely accurate. In addition, not all inaccuracies cause harm or present any material risk of harm. An example that comes readily to mind is an incorrect zip code. It is difficult to imagine how the dissemination of an incorrect zip code, without more, could work any concrete harm.

(emphasis added).

In its recent Horizon decision, the Third Circuit held that the “material risk of harm” language in Spokeo should not be read to raise the bar for pleading concrete injury:

Although it is possible to read the Supreme Court’s decision in Spokeo as creating a requirement that a plaintiff show a statutory violation has caused a “material risk of harm” before he can bring suit, 17 id.

As district courts continue to grapple with Spokeo on a daily basis, the Second Circuit has finally weighed in on how to understand the Supreme Court’s ruling. The decision comes in the context of claims brought under the Truth In Lending Act (TILA).

In Strubel v. Comenity Bank, — F.3d —-, 2016 WL 6892197 (2d Cir. Nov. 23, 2016), the Second Circuit analyzed consumer claims that a bank failed to provide four types of disclosures purportedly required by TILA. The court held that two of the alleged non-disclosures gave rise to concrete injuries under TILA, and two did not.

Perhaps of greatest interest, the court affirmed that under Spokeo,“violations of statutorily mandated procedures” can qualify “as concrete injuries supporting standing.” To determine whether violation of a statutory procedure gives rise to standing, the Second Circuit instructed courts to consider “whether Congress conferred the procedural right in order to protect an individual’s concrete interests.” If so, the procedural violation will suffice to give rise to standing as long as “the procedural violation presents a ‘risk of real harm’ to that concrete interest.”

The Second Circuit recognized that a core objective of TILA is to protect consumers’ concrete interest in avoiding the uninformed use of credit. … Read more

Judge Jeffrey T. Miller of the Southern DIstrict of California became the latest to hold that violations of CIPA give rise to concrete harms under the SCOTUS’s Spokeo decision. The case is Romero v. Securus Techs., Inc., No. 16-cv-1283, 2016 WL 6157953, at *4 (S.D. Cal. Oct. 24, 2016).

CIPA prohibits unauthorized interceptions of communications in order to protect the right of privacy. Plaintiffs in Romero allege that when they were inmates in California correctional facilities they used the defendant’s telephone system, and that the defendant recorded a number of calls between plaintiffs and their attorneys.

A violation of CIPA involves much greater concrete and particularized harm than a technical violation of the Fair Credit Reporting Act (“FRCA”), the statute at issue in Spokeo. While “[a] violation of one of the FCRA’s procedural requirements may result in no harm,” such as reporting of “an incorrect zip code,” Spokeo, 136 S. Ct. at 1549, a violation of CIPA is a violation of privacy rights.

In Patel, the plaintiff alleges defendants disseminated a consumer-information report that wrongly described him as a terrorist and as having a criminal record. Plaintiff further alleged that when he asked defendants for their file on him, they failed to send him his complete file.

The court had previously certified classes; defendants sought decertification under Spokeo, arguing plaintiff had not suffered “concrete” harm. Judge Beeler disagreed as to both aspects of the plaintiff’s case.

First, regarding the inaccurate information, the court reasoned:

The court sees little difficulty in concluding that the alleged inaccuracies — being wrongly branded a potential terrorist, or wrongly ascribed a criminal record — are themselves concrete harms. This is fully in line with Spokeo’s express analysis. There, in describing cases in which the violation of a statutory right “can be sufficient…to constitute injury in fact,” the Court analogized to torts for which the law has “long permitted recovery” — picking out, specifically, the torts of “libel” and “slander per se.” Spokeo, 134 S.

In a brief opinion, the Sixth Circuit has again rejected a defendant’s attempt to moot a class action by offering full monetary relief to the named plaintiff.

In Conway v. Portfolio Recovery Associates, the Sixth Circuit was faced with a procedural posture where a defendant in a suit brought under the Fair Debt Collection Practices Act offered the plaintiff judgment in his favor. Although the plaintiff decided against the offer, the district court dismissed the case for lack of subject matter jurisdiction and entered judgment in plaintiff’s favor, over his objections.

The Sixth Circuit reversed, explaining:

Because the intervening Supreme Court decision in Campbell-Ewald Co. v. Gomez, 136 S. Ct. 663 (2016), squarely resolves the central issue of this appeal, and because we have jurisdiction to say so, the district court’s dismissal and judgment must be set aside.

The Supreme Court has now made clear that an unaccepted offer of settlement or judgment, like the one PRA made to Conway, generally does not moot a case, even if the offer would fully satisfy the plaintiff’s demands for relief. Campbell-Ewald, 136 S. Ct. at 672.

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About the authors

David Stein represents plaintiffs in class action litigation against the country’s largest corporations. He has served as court-appointed lead counsel in various consumer protection class action and multi-district proceedings, and his advocacy at both the trial and appellate levels has resulted in product recalls, permanent injunctive relief, and substantial remuneration for class members.

Andre M. Mura focuses his practice on consumers’ and workers’ rights, products liability, drug and medical devices, federal jurisdiction, and constitutional law. He has authored briefs filed in the U.S. Supreme Court and represented plaintiffs in appeals before the Ninth Circuit.